GSA's Post-FTS 2000 plan goes `back to the future'
The General Services Administration last week revised its Post-FTS 2000 (PF2K) acquisition strategy, eliminating short-term plans to award "niche" contracts and offering vendors a minimum guarantee of $1 billion in revenue.
The changes transform the PF2K acquisition—originally envisioned as a vehicle to award a dozen or more contracts—into a mirror image of the existing FTS 2000 program.
Like the current program involving AT&T and Sprint, PF2K will focus on two or three vendors offering a comprehensive array of services.
The changes announced last week will be incorporated into a final request for proposals, set for release in June, GSA officials said.
John Okay, deputy commissioner of GSA's Federal Telecommunications Service, emphasized that the new program may evolve beyond simply two or three comprehensive contracts.
GSA will retain the ability to award contracts to vendors other than the comprehensive service providers as new technologies or competitive vendors appear on the horizon, he said.
No Initial Niche Contracts
"The initial RFP will not have a niche data contract, but it does not say there will never be one in the long term," Okay said. "If the potential business coming from agencies is such that there is a need for niche contracts, we are prepared to do that."
In addition, he said, GSA will allay concerns expressed by industry by guaranteeing comprehensive vendors a total of $1 billion in business.
The agency will break the procurement into three "packages" of network traffic worth at least $400 million for the first package and $300 million each for the remaining two. Each bidder will be required to submit a proposal for all three traffic scenarios, and a single vendor may win more than one package.
Okay said his organization nixed the idea of a separate contract for switched data services because agencies had not yet demonstrated a need for it.
FTS also scrapped plans to award a niche contract for wireless service and will rely instead on an existing wireless procurement initially planned as an interim contract.
Both services will be available from comprehensive PF2K contracts, he said.
Warren Suss, a president of Warren H. Suss Associates, Jenkintown, Pa., said the concept of niche contracts could still become important in the future as new technologies roll out and the telecom marketplace changes. "I think GSA will move aggressively on these niche contracts as new services are introduced that may not be easy to buy from the comprehensive contracts," he said.
Also like the current contract, PF2K will call for internal competition among the comprehensive providers at the fourth and seventh years of the 10-year program. GSA documents said the recompetitions will be conducted in a manner similar to the price redetermination/service reallocation procedures under FTS 2000.
Okay said the Interagency Management Council will convene following the award of the PF2K contracts to determine which agencies will be assigned to each vendor. That differs from the current contract, in which agencies were assigned before award.
The revised strategy combines the best elements of the FTS 2000 program with GSA's intention to give agencies greater flexibility in the next generation contract, according to Okay.
"It does look a bit like the current contract," Okay acknowledged. "But given the success we've had with the new technologies and pricing mechanisms on FTS 2000, that shouldn't surprise anyone."
GSA will also reserve the right to add local services to the comprehensive contracts as vendors become poised to offer them.
That move is an apparent attempt to increase competition with the regional Bell operating companies that have traditionally handled the government's local service needs, Suss said. "It places very strong pressure on local service providers to get more competitive," he said.
Another revision calls for inside wiring services to be included in the comprehensive contracts—an effort to prepare for the desktop-to-desktop services that are likely to be offered by telecom vendors in the future.
Rick Slifer, director of Post-FTS 2000 programs at MCI Government Markets, said the revisions represent an improvement over the draft solicitations of last year.
"I think GSA has done a real good job of incorporating the concerns of industry into the acquisition strategy. They have allayed our concerns about the niche contracts, and we think these steps will allow industry to make a good business case for bidding."
An AT&T spokeswoman declined to comment, and Sprint officials were unavailable to discuss the revisions last week.